Thai Automotive IndustryThai Industry NewsThai Stocks NewsThailand Company News

Local automakers stung

Local carmakers estimate the overtime stoppage begun two weeks ago in the wake of the Japanese disaster has cost them 10,000 vehicles to date, but normal production is expected to resume after next month’s Songkran holiday.

Suparat Sirisuwanangkura, president of the Federation of Thai Industries’ automotive industry club, said the number of vehicles lost through the downtime would eventually number in the tens of thousands as manufacturers ensure they have enough parts to serve production.

Overtime shifts have been halted at many Thai car factories since March 14, three days after a devastating earthquake and tsunami struck northeastern Japan, resulting in production losses of 5,000 vehicles a week in the Thai facilities, he said.

Mr Suparat, who is also senior vice-president for general affairs and technical research at Toyota Motor Asia Pacific Engineering and Manufacturing Co, was speaking at the Thailand Focus 2011 investment forum in Bangkok yesterday.

He said 50 of his company’s more than 100 suppliers had been affected by the disasters in Japan.

Panasonic, which supplies electronic components and batteries to Toyota, has stopped production at up to eight of its factories located in Japan.

Four of Toyota’s 12 plants in Japan also shut down but will resume production this week.

Toyota, the market leader in Thailand, is maintaining this year’s local production target of 685,000 vehicles, half of which will be exported, said Mr Suparat.

He said deliveries of some models including the Prius hybrid may be delayed, as some high-tech components are imported from Japan.

“But we do expect sales to catch up after Songkran, enabling us to reach this year’s overall target,” said Mr Suparat.

He also expects the overall industry’s production target of 1.8 million vehicles will be achieved – 800,000 for domestic sales and one million for export.

Factors that may affect the industry’s forecast include the southern flooding, which has already dented vehicle sales, said Mr Suparat. High oil prices and the upcoming general election are also of concern.

Mr Suparat said the catastrophe in Japan could persuade Japanese car makers to consider moving more of their production to Thailand.

This would involve mainly passenger cars, as Thailand is already a manufacturing hub for pickup trucks.

However, he believes a healthy future for the Thai automotive industry still hinges on a supportive tax structure and energy policy.

The excise tax revamp now being proposed should be fair and offer an appropriate lead time for all manufacturers, he said.

Isuzu, the Japanese pickup truck giant, said rising farm prices in Thailand will boost local vehicle sales for years to come.

Phaibool Poocharoen, a senior vice-president of Thailand’s Tri Petch Isuzu Sales Co, said the global pickup market was projected to reach 4.6 million units in 2030, from 1.7 million in 2009.

Of those, 2.5 million would be made in Thailand, he said.

Isuzu in Thailand supplies one-third of the Japanese maker’s global output, producing four pickup truck models and derivatives.

The Thai facility, one of Isuzu’s four pickup truck plants worldwide, now runs at nearly full capacity, with output of 200,000 vehicles forecast this year.

Thanathorn Juangroongruangkit, an executive vice-president of the Thai Summit Group, told the forum that the country’s largest auto-parts manufacturer expects sales of US$2.2 billion this year, up from $2 billion last year.

That projection takes into account the effects of the Japanese catastrophe on its business, he said.

Thai Summit also operates factories in other countries including India, China and Malaysia.

Mr Thanathorn said vehicle sales in Southeast Asia will benefit from regional market integration in the form of the Asean Economic Community from 2015.

Accumulated sales of new vehicles in Asean are projected to rise substantially for a decade from 2010, hitting the 40-million-unit mark by 2019.

Global automobile production is forecast to rise from 71 million units last year to 91 million by 2014, 3 million of which will be built in Thailand, he said.

Source: Bangkok Post


ThaiVest Editorial Team
The Thaivest Editorial Team is a dedicated group of writers and editors with a passion for Thailand's vibrant economy, culture, and lifestyle. With diverse backgrounds in finance, economics, and journalism, we provide valuable insights into living well in Thailand, making money online, and practical tools for navigating its dynamic market. Our mission is to keep our readers informed about the latest developments, opportunities, and challenges in Thailand's economic and cultural landscape. Stay connected with Thaivest for reliable, well-rounded coverage of all things Thai.